What You Didn’t Know About Uninsured Motorist Coverage

Uninsured motorist coverage is an often misunderstood auto insurance coverage and is far too often declined by the policyholder, but it does a lot more than most clients are aware. While uninsured motorist coverage is typically associated with an accident involving two or more cars, the coverage often applies when an uninsured motorist hits a bicyclist or a pedestrian.

While California has a law that mandates that all drivers of motor vehicles maintain certain minimum limits of auto insurance coverage, also known as the financial responsibility law, there remains a large amount of irresponsible motorists on the road. As other motorists, bicyclist, and pedestrians are involved in accidents with these individuals they are at risk of not having a resource to recover their damages for medical expenses, lost wages, or pain and suffering after such an accident.

Research from the National Highway Traffic Safety Administration (NHTSA) reports that about 64,000 pedestrians are injured by vehicles in the U.S. every year. While drivers are frequently to blame, pedestrians can contribute to an increased risk by wearing dark clothing, jaywalking and walking while intoxicated or distracted. Pedestrian deaths account for 11% of all motor vehicle deaths.  Following occupant death, pedestrians suffer the most motor vehicle accident fatalities.90% of all pedestrian fatalities involve a single vehicle.

So what if you’re a pedestrian injured by someone who is driving without insurance? You may have your own medical coverage but you’ll have to pay the deductible, co-pays, hospital bills, and possibly use up your vacation time and savings to cover lost wages. Worst-case scenario, what if you or a loved one is killed by an uninsured driver while walking? If you carry uninsured/under-insured motorist coverage for your own vehicle, your policy may cover you even if you’re on foot when the accident happens.

The need to insure against such an instance can be resolved by maintaining uninsured/under-insured motorist coverage on your California auto insurance policy. Uninsured motorist coverage offers protection in the event that an at fault driver that does not have any auto insurance, or an insufficient amount of auto insurance, causes vehicular bodily injury to another party that is insured under the uninsured motorist coverage.

There are various exemptions in the law, but in the vast majority of everyday situations, if you have UM (Uninsured Motorist) and UIM (Under Insured Motorist) coverage, you will be protected against the irresponsible actions of an uninsured or under-insured motorist when you are driving your own car or even if you are victimized while a pedestrian or riding your bicycle.

With UM/UIM protection, you also protect all of your family members living in your household, in the event they are similarly injured while a pedestrian or riding a bike. There is a limitation in the law as to relatives and friends you might be with at the time of such an accident. If you are accompanied by a friend or non-household relative, the UM and UIM coverage only applies if the accident happened while your friend was in, on, entering into or getting out of an insured motor vehicle.

As an example, assume you have UM coverage and you and your wife are struck by an uninsured motorist while riding your bikes together. You are both covered under the UM portion of your auto insurance policy. But if you are riding with your buddy and the same accident happens, only you can make a claim under your policy. Hopefully your buddy has his own UM coverage.

Lets discuss a little further how UIM coverage works. With Under Insured Motorist coverage, you are typically protecting yourself against the negligent driver who has chosen to take out only the California minimum of $15,000 per person and $30,000 per accident. UIM coverage only kicks in once you make a claim and obtain the negligent drivers $15,000 of coverage. If you have $30,000 of UIM coverage, and if the nature and extent of your injuries justifies it, your claim against your own carrier is for $15,000 (that is, you are entitled to the $15,000 from the under-insured driver and $15,000 from your own policy for a total of $30,000). In the case of an under-insured driver, uninsured/under-insured motorist coverage helps compensate for the difference between what that drivers auto insurance policy will cover and the reality of what your damages actually are.

As you can see, UM/UIM coverage can be the most valuable part of your automobile insurance policy. Unfortunately, many insurance agents do not recognize this fact and often write coverage with inadequate limits for UM/UIM. In most cases, the increased limits for UM/UIM do not result in a significant premium increase. It is therefore very important for consumers to be aware of the importance of UM/UIM coverage and to take out a level of coverage they can afford that will provide meaningful benefits in the event of an accident involving an uninsured or under-insured motorist.